How Much Money Should I Put in My House Before I Sell It?
Selling your house is essentially asking people to come in, look around, give it the white glove test, wrinkle their noses at things they consider out-dated and nod with approval at things they like. The question is: how much money should you invest to get those nods? Increasing the value of your home can only help when it comes to selling it, but there is such a thing as putting more money into it than the market will bear.
There's no magic dollar amount for upgrades that help boost your home's resale value, as this varies for each home. Consider the costs of getting everything in your home in good shape, such as fresh coats of paint or new flooring in a room with chipped tiles or floorboards. Be careful not to spend so much that you don't see a return on your investment.
Look at the numbers
By some estimates, you can expect to average a return value of 56 percent of the cost of your remodel. It doesn't make a lot of sense to sink a bunch of money into a home you are going to be leaving, but taking care to upgrade and renovate some areas of the house can make it worth your while, as it will increase the potential for offers.
In deciding which projects to tackle before selling the house, you should have a general idea about how much various projects will pay you back compared to what they cost to do. For example, by some estimates, minor kitchen upgrading brings an 81 percent payback, while a major kitchen remodel is only a 59 percent payback. Adding a steel door to the entryway provides a 91 percent payback, while replacing a roof gives a typical payback value of 68 percent. Adding a wood deck garners an 82 percent payback, while a bathroom addition comes in at 59 percent payback. A bathroom remodel provides a 70 percent payback.
Weigh Your Options
It's likely worth your time to do all the smaller things that will not take a lot of money but will improve your home's showing power. This means deep cleaning, even hiring professionals if needed. Other items include fixing torn screens, taking care of the landscaping and cleaning driveways and sidewalks. Ask an honest friend to do a walk through and list everything negative she sees from the front yard to the backyard. Take that list and handle all the free or low-cost easy fixes. Don't forget those leaky faucets, holes in walls and scuffs on the floors you have grown to ignore. Replacing carpet that is outdated, stained or worn gives your home a fresh new look for just a little bit of money.
Then take a look at the bigger picture. A buyer would rather buy a house that is move-in ready than a house that needs repairs. For example, if your house is worth $150,000 but needs a new roof and the roof will cost $9,000, you are better off spending the $9,000 if you can to maintain that $150,000 value. Depending on the market, buyers may try to shave $9,000 off the offer due to the needed roof. You could end up with a low offer just because you didn't want to spend $9,000 for a new roof prior to listing it.
Spy on the Neighbors
If you can go to local open houses in your area, that is a plus. It gives you the chance to see what other homes for sale look like. If most of the owners took the time to upgrade their bathrooms, you probably want to take a long look at yours. The competition should never look better than what you are offering if it is in the same price range.
Freshen Up the Place
People are drawn to homes with neutral and light colored walls. It takes very little money and time to paint the walls of your home before putting it up for sale and the result will be a fresh, bright-looking home for potential buyers to see. If you have wallpaper anywhere in the home, take it down. It dates the house and people have a hard time imagining what it could look like without it, nor do they want to deal with getting it off the walls post-purchase. Do yourself a favor to boost potential offers and have it removed and the walls painted.
If you are using a real estate agent to list and sell your house, ask for advice about increasing its value. He or she will know the area, what is selling and what is preventing sales. You might be doing a for sale by owner deal. If this is the case, find an agent who will do a walk-through for a fee and make a list of things you need to do.